WASHINGTON, D.C. - The National Taxpayer Advocate today submitted the 2008 Annual Report to Congress, as required by statute. The report describes the most serious problems encountered by taxpayers and makes recommendations for improvement to services for taxpayers and tax administration. The report focuses on two major themes: simplification of the tax laws and the IRS’ treatment of taxpayers who are financially struggling during the economic downturn. Congressional leaders on the Ways and Means Committee have urged action in both areas in recent years, and are eager to work with the incoming Administration on tax simplification and taxpayer assistance, particularly for taxpayers who are facing financial difficulties during this recession.
“I am pleased the Taxpayer Advocate shares our strong concern that the IRS needs to do more help struggling families during this current economic downturn," said Ways and Means Committee Chairman Charles B. Rangel (D-NY). “We stand ready to work with the IRS to assist taxpayers during this filing season."
To ease the burden on taxpayers, the report recommends that the IRS:
1. Make sure collection alternatives are explained and available to taxpayers,
2. Revamp its collection strategy to reach taxpayers before their liabilities balloon due to interest and penalty accumulation,
3. Implement a screen to protect low-income Social Security recipients from automated Federal payment levies (approximately 1.8 million Social Security payments were levied in 2008); and
4. Take steps to ease confusion about tax issues arising from the cancellation of debt (e.g., mortgage debt).
In December 2008, Ways and Means Oversight Subcommittee Chairman John Lewis (D-GA) sent a letter to IRS Commissioner Shulman inquiring what statutory changes might be necessary to ease the burden on taxpayers during the upcoming filing season. The IRS issued a news release describing assistance available to financially distressed taxpayers yesterday. The Ways and Means Subcommittee on Oversight will continue working closely with the Taxpayer Advocate and the IRS on these and other issues in the coming weeks and months.
